Commerce has evolved.
In the last 10 years, there's been a dramatic shift in the way both consumers and companies want to do business. Today, people would rather subscribe to services than to buy products. It's happening everywhere. And it will have a dramatic effect on your business.
Are You Ready?
Business is no longer about one-time transactions. It's about an ongoing relationship with your customers.
The Subscription Economy is built on ever changing relationships with your customers. And the longer and stronger you can build these relationships, the more opportunities you get to drive up recurring revenue. For example, you can move customers from a free to a paid version, add a new service, upgrade those services and finally renew to start the cycle all over again. It's a great business model. But it's easier said than done. Subscriptions introduce a new set of challenges across every industry and every line of business. There's a new set of rules for success in the Subscription Economy.
“By 2015, 35% of Global 2000 companies with non-media digital products will generate incremental revenue of 5% to 10% through subscriptionbased services and revenue models.” - Gartner
Regardless of role or industry, Zuora can get you ready.
Roles:
Marketing & Products | Finance & Ops | CEO & GM | Sales & Account Mgmt. | Service & Support | IT
Industry:
Box is Ready
Box Moves from Fremium to Premium Using Zuora
Marketo is Ready
Zuora enabled Marketo to Scale Its Business Flexibly
The New Rules
With the Subscription Economy, comes a whole new set of rules, fundamentally changing the way successful businesses are built and run.
The Old World
Success used to be tied to the number of products you sold. That's why traditional ERP systems were architected to be product centric. It's all about the one-time transaction. Sure, they can tell you how many units you've shipped, but good luck trying to understand how many active customers you have.
The New World
Today, great businesses are built around customer acquisition and retention, so you need a customer centric view of the world. You need insight into customer metrics, not just transactional metrics...things like customer growth rate, MRR, TCV and churn. You need a system that understands that the customer, not the SKU, sits at the core of your business.
The Old World
Pricing used to be a lot easier...one price, one SKU. And traditional ERPs & GLs evolved to support this model. But SKU-based product catalogs fall down when you're launching recurring and usage based services. Before you know it, you're creating different SKUs for every month of the year. 'January Service' anyone?
The New World
With the right pricing strategy, you'll attract more customers and keep your competitors on their heels. That means combining one-time, recurring, and usage based charges. You'll need flexible subscription terms, from monthly to annual options. Then layer on pricing tiers, free trials, freemium editions, and time-based discounts. Only a plan based pricing catalog can handle this complexity.
The Old World
Traditional ERPs and GLs work great if you're shipping boxes. That world is all about the 'transaction.' It's sell, ship, bill, and then onto the next order. So legacy technology comes with a 'Buy' button...but what about the add-on, the upgrade and they renewal? Those concepts simply don't exist.
The New World
The Subscription Economy is all about an ever-changing customer life cycle. To be successful, you need the tools to help shepherd your customers from a free trial to a premium offering to a renewal...all while keeping track of their value over time. The 'Buy' button has been replaced by the 'Subscribe', 'Upgrade', and 'Renew' buttons.
The Old World
It used to be that you sold either to consumers, or you sold to businesses. You either had a low-touch, low-complexity, high-volume B2C business...or you sold B2B and operated in a high-touch, high-complexity, low-volume environment. But that was then...
The New World
The most successful companies in the Subscription Economy have found a way to sell to anyone. From consumers, to groups of business people, to small businesses, to the largest enterprises. To be successful, you need the tools to handle both high volume and high complexity challenges. And you need to do it with a single system.
The Old World
Getting a handle on your financials can make or break a business. You need to know what's going on across bookings, billings, cash, and revenue. All too often, this information is locked away in different applications, and it's impossible to reconcile everything. Bookings in CRM. Billings & Cash in ERP. And Revenue in some combination of spreadsheets.
The New World
Unfortunately, managing financials in the Subscription Economy can actually be 10 times harder. You're still tracking bookings, billings, cash, and revenue, but now you need to manage everything over time while subscriptions are constantly changing. Success means a unified view of these interrelated and evolving metrics so you know with confidence when to throttle back.
Next Steps
Zuora Demo
Watch this short demo and learn how Zuora can help you.
Zuora Resources
Subscription Management Resources.
